Globally diversified equity portfolio with strong low volatility tilt and efficient risk adjusted structure
Report created on May 7, 2024Risk profile
4/7
Diversification profile
4/5
Positions
-
VG Vanguard FTSE All-World UCITS ETF
VGWL - IE00B3RBWM25 70.00% -
SP SPDR S&P UK Dividend Aristocrats
SPYG - IE00B6S2Z822 10.00% -
UI UBS ETF SICAV - MSCI Canada UCITS ETF
UIM9 - LU0446734872 10.00% -
VF Vanguard FTSE Emerging Markets UCITS
VFEM - IE00B3VVMM84 10.00%
This portfolio is a simple four‑ETF, 100% equity mix with a clear core‑satellite structure. About 70% sits in a broad global fund, while three smaller pieces tilt toward dividends, Canada, and emerging markets. That layout keeps things easy to manage and avoids the complexity of many small positions. A core‑satellite setup like this works well when someone wants global market exposure but still adds a few deliberate tilts for income or regional views. The big takeaway is that the structure is clean, understandable, and already broadly diversified, which is a solid starting point for a balanced risk profile.
Growth
From late 2017 to today, €1,000 grew to about €2,086, giving a compound annual growth rate (CAGR) of 9.18%. CAGR is like your average speed on a long road trip, smoothing out all the bumps. Compared with the global market, which earned about 10.19%, the portfolio slightly lagged but with a very similar maximum loss of roughly -35%. Against the US market, the gap is larger, which mainly reflects how strongly US stocks performed in this period. The big message: performance has been solid and consistent with a diversified global equity approach, even if it didn’t fully match the exceptional US bull run.
Asset classes
- Stocks 100%
All assets here are stocks, with 0% in bonds or cash. That’s why the profile is classified as “balanced” but still experiences meaningful ups and downs. Asset class mix is one of the biggest drivers of risk: stocks historically grow faster than bonds but can fall sharply in bear markets. Having 100% equities generally suits investors with multi‑decade horizons who can tolerate market swings without needing to sell. The advantage is strong long‑term growth potential; the trade‑off is higher short‑term volatility and drawdowns. Anyone wanting smoother ride or nearer‑term withdrawals would normally mix in some defensive assets outside this setup.
Sectors
- Technology 22%
- Financials 21%
- Industrials 12%
- Consumer Discretionary 9%
- Health Care 7%
- Telecommunications 7%
- Consumer Staples 6%
- Basic Materials 6%
- Energy 5%
- Utilities 3%
- Real Estate 3%
Sector exposure is nicely spread out, with technology and financials the largest at 22% and 21% but no single area dominating. Smaller allocations to industrials, consumer areas, health care, telecoms, materials, energy, utilities, and real estate help smooth sector‑specific shocks. This allocation is well‑balanced and aligns closely with broad global standards, which is a strong indicator of diversification. Remember that tech‑heavy periods can be more sensitive to interest rates and growth expectations, while financials react to credit and rate cycles. Overall, the mix keeps the portfolio from relying too heavily on any single economic story or industry trend.
Regions
- North America 54%
- Europe Developed 21%
- Asia Emerging 9%
- Asia Developed 7%
- Japan 4%
- Africa/Middle East 2%
- Latin America 2%
- Australasia 1%
Geographically, more than half the exposure sits in North America, with the rest well spread across developed Europe, Asia, Japan, and multiple emerging regions. This pattern is broadly in line with global market weights, leaning slightly toward North America but not excessively so. That’s positive: it captures the depth and innovation of major markets while still tapping into the growth potential of emerging economies. Geographic spread matters because different regions face different economic cycles, political risks, and currency moves. Here, global coverage looks strong, which helps reduce the risk that any single country or region drives overall outcomes.
Market capitalization
- Mega-cap 46%
- Large-cap 33%
- Mid-cap 21%
By market capitalization, nearly half the portfolio is in mega‑cap companies, a third in large caps, and the rest in mid caps, with little to no small‑cap exposure. Big companies tend to be more stable, more diversified, and often more profitable, which can reduce extreme volatility compared with a heavy small‑cap tilt. At the same time, some of the very long‑term “home run” stories often start in smaller companies, which are under‑represented here. The main takeaway: the size profile is closer to mainstream global indexes, prioritizing stability and liquidity over an aggressive bet on smaller, more volatile firms.
True holdings
-
NV NVIDIA Corporation 2.95%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AA Apple Inc 2.74%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 2.60%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
- Vanguard FTSE Emerging Markets UCITS
-
MS Microsoft Corporation 2.07%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AM Amazon.com Inc 1.43%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
GO Alphabet Inc Class A 1.29%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AV Broadcom Inc 1.05%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
GO Alphabet Inc Class C 1.05%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
ME Meta Platforms Inc. 1.01%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
TS Tesla Inc 0.81%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard FTSE All-World UCITS ETF
- Top 10 total 17.01%
Looking through the ETFs, the largest underlying exposures are well‑known global giants like NVIDIA, Apple, TSMC, Microsoft, and Amazon. Several of these appear in more than one ETF, which quietly increases exposure to big global leaders, especially in technology and communication‑related areas. Because only top‑10 ETF holdings are used, actual overlap is probably somewhat higher than reported. Hidden overlap isn’t necessarily bad; these companies have driven a lot of market returns. But it does mean that when big global names have a rough patch, the impact can be felt across several parts of the portfolio at once.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows very high low volatility and high value and yield tilts. Factors are like underlying “personality traits” of investments that research links to returns. A strong low volatility tilt means holdings tend to be more stable, which often cushions downturns but can lag in wild bull markets led by speculative names. The value tilt leans toward cheaper stocks relative to fundamentals, which can do well when markets rotate away from expensive growth favorites. High yield indicates a preference for above‑average dividends. Combined, this creates a more defensive equity profile: still fully in stocks, but with a calmer, income‑friendly style.
Risk contribution
-
Vanguard FTSE All-World UCITS ETF
Weight: 70.00% 70.4% -
UBS ETF SICAV - MSCI Canada UCITS ETF
Weight: 10.00% 10.2% -
Vanguard FTSE Emerging Markets UCITS
Weight: 10.00% 9.9% -
SPDR S&P UK Dividend Aristocrats
Weight: 10.00% 9.5%
Risk contribution shows how much each ETF adds to the portfolio’s total ups and downs, which can differ from simple weights. Here, the global ETF at 70% weight contributes about 70% of risk, and the three 10% satellites each add roughly 10%. That’s a very proportional pattern, with no single satellite accidentally dominating risk. It also confirms that most volatility comes from the global core, which is intentional and appropriate. If someone wanted to change the overall risk profile, adjusting the weight of that main ETF would have the biggest impact, while small tweaks to the satellites would matter less.
Risk vs. return
This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.
Click on the colored dots to explore allocations.
The risk‑return chart shows the portfolio sitting right on or very close to the efficient frontier. The efficient frontier is the curve of the best return you can get for each risk level using your existing ingredients. With a Sharpe ratio of 0.51 versus 0.64 for the theoretical optimum, the current mix is already quite efficient for its volatility. The minimum‑risk version would barely reduce risk while also trimming expected return. That means there’s no big penalty from the current weights; any improvement from reweighting would likely be incremental, not transformational. Overall, the allocation looks well‑tuned for its chosen risk level.
Dividends
- Vanguard FTSE All-World UCITS ETF 0.60%
- Weighted yield (per year) 0.42%
The overall dividend yield is modest at about 0.42%, even though there is a dedicated UK dividend ETF. That reflects the strong presence of global growth companies and the current environment of generally lower yields on many large stocks. Dividends are the cash payouts companies share with investors; over time they can be an important part of total return, especially when reinvested. Here, the yield tilt is more about quality and stability than about building a high‑income portfolio. Anyone seeking substantial current income would normally combine this with other income sources or higher‑yielding assets elsewhere.
Ongoing product costs
- SPDR S&P UK Dividend Aristocrats 0.30%
- UBS ETF SICAV - MSCI Canada UCITS ETF 0.33%
- Vanguard FTSE Emerging Markets UCITS 0.17%
- Vanguard FTSE All-World UCITS ETF 0.19%
- Weighted costs total (per year) 0.21%
Total ongoing costs are very low at around 0.21% per year. That’s because all positions are broad, liquid ETFs with competitive expense ratios. Costs may look tiny, but over decades they compound significantly, like a slow leak in a bucket. Keeping them low leaves more of each year’s return in your account. In this case, the costs are impressively low, supporting better long‑term performance and aligning with index‑investing best practices. There isn’t an obvious need to squeeze fees further, so cost management here can be considered a real strength and not an area requiring major adjustment.
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